9911796707
TMI Blog1984 (12) TMI 102X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in a refund, no interest was to be charged. It was also claimed that in the case of a registered firm, charging of interest under section 139(8), treating it as an unregistered firm, is debatable and highly controversial, relying on the decisions of the different High Courts. 3. The ITO did not accept the submissions made on behalf of the assessee. He pointed out that the interest was duly charged while making the assessment originally under section 143(3) and there was no objection on the part of the assessee in so charging of interest. He mentioned that the law is specific with regard to charging of interest in the case of a registered firm. He pointed out that tax, for the purpose of charging interest under section 139(8), is to be calculated as that of an unregistered firm. He pointed out that in the present case, the tax as an unregistered firm, after setting off the tax deducted at source, advance tax, being more, interest under section 139(8), has to be charged. He, therefore, concluded that interest was clearly chargeable amounting to Rs. 3,199. 4. The assessee took up the matter before the Commissioner (Appeals) stating that there was a delay of 7 months in the fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat this provision was discriminatory in nature. The Commissioner (Appeals) observed that in the abovementioned case, as in the cases of other decisions cited on behalf of the assessee, the decision related to the provision incorporated in sub-clause (a) of clause (iii) of the proviso to sub-section (1) of section 139, as it stood before it was amended by the Taxation Laws (Amendment) Act, 1970. According to him, the provision of section 139(8) was clearly mandatory and there was no scope for any discretion on the part of the ITO. He was also of the opinion that Explanation 2 to section 139(8) clearly stipulates and enjoins on the ITO that where the assessee is a registered firm or an unregistered firm which has been assessed under clause (b) of section 183 of the Act, the tax payable on the total income shall be the amount of tax which would have been payable if the firm had been assessed as an unregistered firm. The Commissioner (Appeals) was of the view that the decisions relied on by the assessee related to the law and the provisions as they stood at the relevant time. He also expressed the view that the income-tax authorities and the Tribunal have no jurisdiction on the legali ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is appeal by the assessee. 9. It is submitted on behalf of the assessee that the Commissioner (Appeals) misdirected himself in not taking into account the point that charging of interest under section 139(8), treating a registered firm as an unregistered one, has been held to be unconstitutional and was struck down by the different High Courts, on the plea that the tax authorities could not question such validity of any provision of the Act. It is also the appeal of the assessee that the Commissioner (Appeals) erred in not appreciating the fact that accepting the decision of the High Court and acting in accordance with the same, did not amount to questioning the vires or constitutional validity of the provisions of the Act. It is also the appeal of the assessee that the Commissioner (Appeals) erred in upholding the charging of interest by the ITO under section 154, when there was no tax payable by the assessee. It is submitted by the assessee's learned counsel that on the facts of the case, the Commissioner (Appeals) should have cancelled the order passed by the ITO under section 154 as there was no mistake apparent from the record. It is argued that at any rate, the charging of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rly when interest was charged when passing the assessment order originally under section 143(3), which was also found by the Commissioner (Appeals) to be due to oversight, when the ITO did not charge interest under section 139(8), while giving effect to the order of the first appellate authority in the quantum appeal. 12. It is also submitted on behalf of the revenue that the assessee being treated as an unregistered firm in the present context, has not agitated earlier before the appellate authority. According to the learned departmental representative, it is wrong to contend that two views were possible, as in fact, there is only one view, in the present facts of the case. It is pointed out that in Lachmandas Raghunath Das Parihar's case, the Special Bench of the Tribunal, Jaipur, dealt with a completely different situation, in which the interest under section 139(8) was not charged originally while passing the order of the assessment under section 143(3) and, therefore, that decision would have no application to the facts of the case before us. In short, it is urged that the appeal of the assessee having no merit or substance may be rejected. 13. We have heard both the side ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re other decisions also. The stand taken by the assessee before us is, therefore, that when two views are possible and the issue being highly debatable, action under section 154 cannot be resorted to. It is pertinent at this stage to refer to another decision of the Hon'ble Calcutta High Court in the case of V.R. Sonti v. CIT [1979] 117 ITR 838 in which it was, inter alia, held that the income-tax authorities as well as the appellate authorities, when dealing with rectification matters, should not look only at the decisions of the particular High Court under whose advisory jurisdiction it acts in order to find out whether that High Court has taken different views on the question of law before it. They must consider the decisions of all the High Courts and if there is a divergence of judicial opinion on the question of law or two conceivable opinions are possible on it, they must hold that the mistake is not apparent from the record. In other words, when the different High Courts have expressed different judicial opinions, action under section 154 would not be warranted by the ITO or by the appellate authorities under the Act. It was also held in that case that as the Hon'ble Suprem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of interest in the assessment order itself made under section 143(3). In another context, in the case of Sundardas Thackersay Bros. v. CIT [1984] 147 ITR 524 the Hon'ble Calcutta High Court sustained the action under section 154 made by the ITO in charging interest from the assessee-firm, treating the assessee as an unregistered firm. Of course, in that case, the assessee did not object to the rectification made under section 154, but a challenge was made on the basis that no notice was issued by the ITO before the rectification was made. 18. The Commissioner (Appeals), in our opinion, has correctly pointed out that in the case of Fomra Bros., the Hon'ble Madras High Court did not deal with the special provision of Explanation 2 to section 139(8), which is presently involved. 19. The Hon'ble Calcutta High Court in the case of Indian Aluminium Co. Ltd. v. CIT [1983] 141 ITR 258 has held that in order to determine whether section 154 is attracted to the facts and circumstances of a case, it has to be found out whether there was any mistake at all, and that apart, whether such mistake was apparent from the record, and a debatable point of law is not a mistake apparent from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this context, it is necessary to refer again to the decision in the case of Priya Gopal Bishoyee, in which it was noted that on the date of imposition of penalty there would be no assessed tax within the meaning of the Explanation to sub-clause (b) (sic) of section 271(1)(a), if it was a registered firm. It was pointed out that if the assessee was an unregistered firm, in view of the above provision, then the assessed tax must be calculated on that basis. Thus, the contention of the assessee in this respect also cannot be conceded. 21. We have heard the learned counsels for both the sides at length and we find that the decision of the Special Bench of the Tribunal, as relied on by the assessee, would not be helpful to decide the present case before us as the facts are distinguishable. 22. In view of what we have discussed in various paragraphs above, we are of the opinion that the Commissioner (Appeals) was justified on the facts of the case in sustaining the order of the ITO under section 154. We find no substance in the appeal of the assessee. The order of the Commissioner (Appeals) is, accordingly, sustained. 23. The appeal by the assessee is dismissed. - - TaxTMI - ..... X X X X Extracts X X X X X X X X Extracts X X X X
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